TCS, Mitsubishi sign agreement; to merge IT units

The merger, in which TCS will hold 51 percent stake and Mitsubishi 49 percent, will create a new IT services company of significant scale in the Japanese market with annual turnover of over USD 600 million.

New Delhi: India's largest software services firm Tata Consultancy Services (TCS) has signed an agreement with Japanese major Mitsubishi Corporation to form a single IT services unit, the company said Monday.

The merger, in which TCS will hold 51 percent stake and Mitsubishi 49 percent, will create a new IT services company of significant scale in the Japanese market with annual turnover of over USD 600 million.

"TCS Japan, IT Frontier Corporation (ITF) - Mitsubishi's 100 percent IT subsidiary -- and Nippon TCS Solution Center (NTSC), to merge as a single new entity," TCS said in a statement.

TCS will hold 51 percent in the merged entity, while Mitsubishi will have 49 percent and the merged entities would be operational from July 2014, it added.

ITF brings its long-standing relationships with Japanese corporations, talented workforce and competencies in industries like retail, distribution and trading, TCS said.

"This strategic transaction signifies our serious commitment to the Japan market. TCS will now have the scale, strong local presence and our full range of global capabilities to serve the Japanese corporations effectively and accelerate our growth in Japan market," TCS CEO and Managing Director N Chandrasekaran said.